Entity information:
INCOME TAXES

The provision for federal income taxes consists of (in thousands):
 
2017
 
2016
 
2015
Income taxes currently payable
$
3,018

 
3,515

 
4,280

Revaluation of net deferred tax liability
(224
)
 
—

 
—

Deferred income tax provision (benefit)
1,478

 
928

 
(58
)
Provision for income taxes
$
4,272

 
4,443

 
4,222



A reconciliation between the statutory income tax and the Company's effective tax rate follows:
 
2017
 
2016
 
2015
Statutory tax rate
34.0
 %
 
34.0
 %
 
34.0
 %
Increase (decrease) resulting from -
 

 
 

 
 

Tax exempt interest
(6.0
)%
 
(6.3
)%
 
(6.0
)%
Tax exempt income on bank owned life insurance
(1.7
)%
 
(1.5
)%
 
(1.4
)%
Revaluation of net deferred tax liability
(1.3
)%
 
—
 %
 
—
 %
Captive insurance premium income
(0.9
)%
 
—
 %
 
—
 %
Other – net
0.7
 %
 
0.1
 %
 
0.3
 %
Effective tax rate
24.8
 %
 
26.3
 %
 
26.9
 %


Deferred tax assets and liabilities, included in the Consolidated Balance Sheets with accrued interest and other liabilities in 2017 and other assets in 2016, consist of the following at December 31 (in thousands):
 
2017
 
2016
Deferred tax assets:
 
 
 
Allowance for loan losses
$
715

 
1,223

Net unrealized losses on investment securities available-for-sale
707

 
1,369

Fair value adjustment on loans acquired from merger with First Capital
238

 
592

Pension and deferred compensation
760

 
1,157

Other
471

 
546

 
2,891

 
4,887

Deferred tax liabilities:
 

 
 

Depreciation of premises and equipment
(1,672
)
 
(1,332
)
Amortization of intangibles
(1,030
)
 
(1,567
)
Prepaid expenses
(210
)
 
—

Deferred loan fees
(1
)
 
(2
)
FHLB stock dividends
(216
)
 
(351
)
Fair value adjustment on securities acquired from merger with First Capital
(9
)
 
(19
)
 
(3,138
)
 
(3,271
)
Net deferred tax (liabilities) assets
$
(247
)
 
1,616



As of December 31, 2017 and 2016 there were no unrecognized tax benefits and the Company does not anticipate the total amount of unrecognized tax benefits will significantly change within the next twelve months.  There were no amounts recognized for interest and penalties in the consolidated statements of income for the three-year period ended December 31, 2017.

The Company is no longer subject to examination by federal tax authorities for years before 2014.

The Tax Cuts and Jobs Act ("Tax Act") was enacted on December 22, 2017. Among other changes, the Tax Act reduces the US Federal corporate tax rate from 35% to 21%. At December 31, 2017, the Company has substantially completed its accounting for the tax effects of enactment of the Tax Act. For deferred tax assets and liabilities, amounts were remeasured based on the rates expected to reverse in the future, which is now 21%. The Company continues to analyze certain aspects of the Tax Act and further refinements are possible, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts, although LCNB management does not expect these adjustments to materially impact its financial statements.